TIDMOCH

RNS Number : 2939L

Orchid Developments Group Ltd

03 September 2012

3 September 2012

Orchid Developments Group Ltd.

("Orchid" or the "Group")

Court award against Orchid Sofia Hills Ltd and update re financial position

Orchid (AIM: OCH), the Bulgarian focused property developer and investor, announces a court award against Orchid Sofia Hills Ltd and update of its financial position. As reported in the Group's interim results for the period ended 30 June 2011 (released on 30 September 2011) there were two court cases pending in Sofia City court between Consortium Remi Group JCS (the general building contractor for the Group's Orchid Hills development in Sofia) and Orchid Sofia Hills Ltd.

In the first court case, the court found in favour of Orchid Sofia Hills Ltd in relation to the retention of EUR186,000 by Orchid Sofia Hills Ltd as a deduction for low quality execution of works by Consortium Remi Group JCS, which was claiming EUR197,710.

In the second court case, Consortium Remi Group JCS had made claims relating to a delay of 58 days in the payment of 4 invoices by Orchid Sofia Hills Ltd to Consortium Remi Group JCS. The amount claimed was for the interest relating to the delay in payment of the invoices. The Sofia City court found in favour of Consortium Remi Group JCS and awarded an amount of EUR213,000, of which EUR36,211 was seized from the bank accounts of Orchid Sofia Hills Ltd in July 2011 (as previously announced).

The Board has since learned that the Sofia City court has allowed Consortium Remi Group JCS to appoint a new bailiff in relation to the outstanding claim. This bailiff has taken possession of the remaining 12 apartments held for sale in Orchid Sofia Hills and is preparing to sell these at public auction to satisfy the outstanding court award.

Orchid Sofia Hills Ltd is a ring-fenced subsidiary of the Group, however, the 12 seized apartments can no longer be expected to be sold for the benefit of the Group.

As announced on 16 August 2012, the Directors believe that the Group will not be able to continue to operate, taking into account its current cashflows, unless additional capital is raised. The Board is continuing to evaluate the best manner in which to address its immediate working capital needs. A further announcement will be made in due course.

Ends

 
 Contacts: 
 Orchid Developments            www.orchid-dev.com 
  Guy Meyohas                      +41 798 200 200 
 Shore Capital and Corporate 
  Limited 
  Bidhi Bhoma / Toby Gibbs        +44 20 7408 4090 
 MHP Communications 
  Reg Hoare / Tim McCall 
  / Vicky Watkins                 +44 20 3128 8100

Notes to Editors:

Orchid Developments Group Ltd (OCH.L), which listed on the AIM market in June 2005, was established with the aim of generating value for shareholders by investing in real estate and leisure business opportunities initially in Bulgaria.

The company is active in all principal sub-sectors of the Bulgarian real estate and leisure markets and currently holds three residential and six commercial property developments in Sofia and Varna. Its principal investment is Grand Mall Varna, one of Bulgaria's leading shopping malls.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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